In Q2 concall, Avanti team mentioned that farmers are slowly returning back to shrimp farming with improvement in shrimp prices and rise in export volumes . I feel, slowly and steadily sector is coming back on track. While, we may not see major spike in Q3 (being lean season), I expect Q4 this year to be better.

Indian shrimp exports have been faring better than the broader market. Any particular reason for indian shrimp increasing market share? I know low cost is a competitive advantage. Anything else apart from that?

Why did the US consumption fall so significantly in some of the months (July)? I mean any reason for the consumption to be seasonal or cyclical?

Disc: Invested and small part of portfolio. Evaluating the risks/rationale to scale up/down the investment size.

To my knowledge, adverse climatic conditions in US at the beginning of this year led to a drop in consumption of shrimp and eventually led to buildup of inventory in US. This led to lower off take by US in subsequent months and also fall in global shrimp prices. Hence, we see there is a drop in June/July. Usually I believe, peak buying season of US customers from Indian exporters happens from July till October. Many exporting countries could not have coped up with drop in shrimp prices and would have temporarily suspended shrimp farming (even in India, there has been a drop in repeat crops during July- Sep due to which Avanti reported much lower Q2). Previously, countries like Thailand, China used to do larger exports than current monthly numbers. Thailand fell because of breakdown of EMS disease in the past (?, not sure if I got this correct) and China’s exports reduced over the years due to higher internal consumption and higher ADD being imposed by US. Have read in the past that, India has a great potential compared to few other countries to promote shrimp farming, due to favorable climatic conditions and vast coastline (not sure about cheap labor as haven’t seen any data pertaining to this). Will need to see, how the op drivers pan out in the coming quarters.

Here is the 3 year chart of Shrimp prices (based on exports from India). Usually they used to be in a range barring 3-4 month period earlier this year which brought the Indian industry (particularly farmers) into trouble and many of them skipped the second crop!